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CONCLUSION

The financial performance has been carried out in an effort to compare the performances

these two financial institutions which are Public Bank and AIA Insurance Company and its external
institutions. RHB and Sun Life Company are the companies that will be reviewed to draw some

conclusion for the year 2018. Financial statements of Public Bank and AIA Insurance were used
to analyses the financial performance and its trend over the years (2016-2018) under study.
Profitability ratios, liquidity ratio, capital adequacy ratio, asset quality ratio and underwriting ratio

were calculated to compare these financial institutions.

Examination of all ratios between Public Bank and RHB indicates that Public Bank is more
efficient in terms of generating income and expenses during the year 2018 as compared to RHB

bank. The findings also show that Public Bank is more efficient in terms of utilization of their assets
and equity which can increase the return of investment to the bank. However, Public Bank is

slightly weak in managing their assets and equity as most of their assets are financed by creditors
than its owners (shareholders). It is seen that Public Bank may have likely to not overcome a
financial downturn as less capitals are held than RHB and has poor asset quality which indicates

to bad performance in managing its non-performing loan. The bank may solve these problems by
buying additional shares to increase its liquidity to cover their unforeseen losses. It can also be
resolved by revising their lending policy so that the default risk can be minimized. Hence, the

efficiency and stability of the bank’s financial system can be achieved.

For AIA Insurance Company, it is being reviewed in terms of profitability, underwriting,

asset quality and liquidity ratio between Sun Life Insurance Company for the year 2018. The
finding shows that AIA Insurance Company is only good in managing its expenses over a year by
cutting down unnecessary expenses except that they need to improve more in utilizing its asset

to generate profit. It is seen that Sun Life Insurance Company is good in every ratio that is
calculated as compared with AIA Insurance Company except expenses ratio. The company needs
to formulate their guidelines and policy back so that they are on the right track by using their

assets and equity to get a better return on the investment. They also need to have better
management of claims subrogation for insurance provider to recover the money they spent on its
client or set rules and subrogation warnings for flag cases that requires immediate attention to

reduce loss ratio. The company needs to work and move towards a good return, because that is
a means of ensuring its market survival.

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